The Hindu Business Line : Tribunal declines to stay ISP fees — Gives 2 more weeks to comply with DoT order

IN a blow to the Internet service providers (ISPs), the Telecom Dispute Settlement Appellate Tribunal (TDSAT) on Friday refused to grant any stay on the Government's decision to impose entry fee and licence fee on ISPs for offering virtual private network services.

The TDSAT has asked all the ISPs to comply with the Government order by March 3.

"We are not inclined to grant an interim stay at this moment," Mr Justice D.P. Wadhwa said in the interim order. In a minor relief to the ISPs, the TDSAT has asked the Department of Telecom to extend the last date for compliance by another two weeks.

DoT had given an ultimatum to the ISPs to either pay up the entry fee ranging between Rs 1 crore and Rs 10 crore by February 17, or stop offering VPN services. Already Sify and HCL Infinet have paid up the entry fee.

However, other Internet operators are now banking on the final outcome of the case. The TDSAT will hear the merits of the case on March 17.

"The ISPs have been offering VPN services for more than five years, so obviously this comes as a setback. More than 40 per cent of the revenues come from this service. We will await the final decision of the court," said a leading ISP.

DoT had imposed an annual licence fee of 8 per cent of the gross revenue apart from a one-time non-refundable entry fee of Rs 10 crore for category A, Rs 2 crore for B and Rs 1 crore for C category ISPs.

"Most of the ISPs are loss making ventures and the entry fee would be an additional burden on them," said an Internet Service Providers Association of India (ISPAI) official.

The ISPs also pointed out that the TDSAT order weakens the Telecom Regulatory Authority of India since it had told DoT to take its recommendations before announcing the entry fee.

DoT, however, maintained that the Government was not required to seek TRAI's views in this matter.

The entry fee and licence on the ISPs is likely to increase the VPN service charges. VPN is used by large corporates to connect their branch offices for internal communication.

Until now ISPs were not paying any entry fee and could offer the services at a lower cost than what was being offered by long distance operators.

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